Copper slides to one-week low on China demand concerns, rising stocks

LONDON: Copper prices hit a one-week low on Wednesday, extending their fall to the third consecutive session, due to concerns about demand in top metals consumer China and rising exchange stockpiles.

Three-month copper on the London Metal Exchange was down 0.4% at $9,826.50 per metric ton by 0957 GMT, after touching $9,800, its lowest since July 3.

In China, investors are watching next week’s key party leaders gathering for hints on policies to address a protracted property crisis, weak domestic demand and a sliding yuan.

The country’s June inflation data missed expectations, while producer price deflation persisted.

“The inflation data shows that demand is not very good,” said Dan Smith, head of research at Amalgamated Metal Trading.

A Reuters poll of analysts estimated that China’s economy likely grew 5.1% in the second quarter, slowing from a strong start in the first three months.

Copper steady as weak dollar counters sluggish demand in China

There were also signs that China’s top copper smelters expected the supply shortage of copper concentrates, used in the production of refined copper, to ease slightly in the coming months as they agreed on third-quarter price guidance for processing charges, which were the lowest since at least 2015 but higher than current spot levels.

LME copper, used in power and construction, was down 11.5% since speculative buying took prices to a record high of $11,104.5 on May 20.

Signalling that the appetite for imports of refined copper to China was still lacking after the country’s high exports in May, copper stockpiles in LME-registered warehouses rose to 195,475 tons, the strongest level since October 2021, after arrivals of 5,950 tons in two Asian locations.

Ample availability of nearby supply pushed the discount for the LME cash copper over the three-month contract to the fresh record high of $158 a ton.

LME aluminium was 0.3% lower at $2,488 a ton, zinc slipped 0.2% to $2,922.50, lead dipped 0.2% to $2,189, while nickel shed 0.3% to $17,090. Tin rose 0.3% to $34,365.